AIG needs even more money. Bloomberg is reporting that the company that once was the largest insurer in the world plans to use the new commercial paper subsidy program to borrow $10 billion. Keep in mind that AIG has already borrowed $80 billion or so of the $122.8 billion credit facility from the Fed.
AIG would probably tap less than $10 billion through the new commercial paper program, said the person, who declined to be identified because no agreement had been reached. AIG, once the world’s largest insurer, may seek the additional funding after the Federal Reserve expanded its $85 billion lifeline to the company last week by making another $37.8 billion available.
Chief Executive Officer Edward Liddy is selling units including U.S. life insurance, plane leasing and consumer finance to repay the government loan. New York-based AIG has already tapped two-thirds of the $122.8 billion made available through the two credit lines.
“We’ve got a plan that will allow us to repay the Fed loan and emerge as a strong international property-casualty insurer with a presence in international life insurance,” said AIG spokesman Nicholas Ashooh.
The Fed said last week it will create a special fund to buy commercial paper, seeking to unblock the financing that drives everyday commerce for American businesses. A spokesman for the New York Fed declined to comment on individual companies that may seek cash through the fund.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.